SIA ups IC forecast by a wide margin

SAN JOSE, Calif. -- The Semiconductor Industry Association (SIA) has raised its chip outlook for 2010--by a wide margin.

Last year at its annual event, the industry organization said sales for 2010 would improve by 10.2 percent, to $242.1 billion, followed in 2011 by a smaller growth spurt of 8.4 percent, to $262.3 billion.

The SIA is known for its shaky forecasts. It usually misses the numbers by a mile. On Thursday (June 10), the SIA released an updated industry forecast that projects worldwide chip sales will grow by 28.4 percent to $290.5 billion in 2010. The forecast projects 6.3 percent growth in 2011 to $308.7 billion, followed by 2.9 percent growth in 2012 to $317.8 billion.

“Healthy demand in all major product sectors and in all geographic markets drove sales of semiconductors to record levels in the first four months of 2010,” said SIA President George Scalise, in a statement. “While the year-on-year growth rate will moderate through the remainder of the year, we expect modest sequential sales growth in line with historic seasonal patterns. The industry began the year with inventories in balance and we do not see evidence of excess inventory accumulation at this time.

“Economic forecasts project global economic growth rates of 4.6 percent in 2010 and 4.4 percent for 2011, with the fastest growth expected to be in emerging economies. These emerging markets -- especially China and India -- are creating demand for Information Technology products, which in turn fuels demand for semiconductors,” Scalise concluded.

Others have also raised their previous--and mistaken-- forecasts amid booming demand. After declining in 2008 and 2009, semiconductor industry revenue is set to grow nearly 31 percent in 2010, reaching a record $300.3 billion, according to a revised forecast issued by market research firm iSuppli Corp. in May.

Another research firm recently raised its chip forecast. But the firm warns about a slowdown and ''correction'' in the second half.

Worldwide chip revenue is forecast to reach $290 billion in 2010, a 27.1 percent increase from 2009 revenue of $228 billion, according to Gartner, Inc. The outlook for the semiconductor industry has improved from Gartner's first quarter 2010 forecast, when it projected worldwide semiconductor sales to grow 19.9 percent.

The World Semiconductor Trade Statistics (WSTS) organization recently raised its forecast for the annual growth of the semiconductor chip market. It now projects that the semiconductor market will reach a value of $291 billion in 2010, representing growth of 28.6 percent compared with the market in 2009.

VLSI Research Inc. may up its forcast, as ''IC sales are now expected to increase 28 percent compared to the previous forecast of 25 percent.''